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Proposed Pittsburgh land bank aims to end blight, speed redevelopment

| Tuesday, Jan. 28, 2014, 12:26 p.m.

Winter disguises urban blight.

Snow hides remnants of overgrown summer weeds, but in Garfield, three-story homes have broken windows. In Larimer, one-time family homes have boarded-up doors. Citywide, 18.7 percent of properties are considered physically, or economically, distressed.

To reduce blight, some members of Pittsburgh City Council want to establish a land bank, a quasi-independent public entity tasked with acquiring and developing dilapidated properties otherwise dismissed as eyesores, drug dens or safety hazards.

The land bank could acquire tax-delinquent properties that can't be sold otherwise and get them back on the market.

Rick Swartz, executive director of Bloomfield-Garfield Corp., said vacant properties are impediments and opportunities.

“If it's not achieving its highest, best use, then it's a detriment to the values of any property on the street,” he said. “But it's also an opportunity because then you can do what other neighborhoods can't. You can create what the city's going to look like in its next phase.”

Land bank-eligible properties include those the city owns or those that are tax delinquent for more than two years. Pittsburgh has 26,140 eligible properties, roughly half of which the city and its Urban Redevelopment Authority own. About 13,000 more are privately owned and tax-delinquent for at least two years, many of them vacant.

Pittsburgh's land bank would work to get these properties to developers. It would be governed by a seven-member board, four members appointed by the mayor and three by council.

“By getting all the land in a land bank, it gives us some more flexibility, but we also have to have some oversight,” said Councilman Corey O'Connor, adding that discussions with council continue. A hearing is scheduled for Feb. 6.

Pennsylvania law grants land banks authority to remove tax liens and expedite title acquisitions. Liz Hersh, executive director of the Housing Alliance of Pennsylvania, said land banks are particularly useful for turning over long-abandoned properties that cycle through tax sales with no buyers.

“One obstacle may be (that) the tax liens on the property exceed the value of the property,” Hersh said. “There's no market incentive to acquire that property, because the numbers don't work. It's just too expensive.”

Hersh said land banks provide a cheaper, easier way of marketing properties.

“What most communities are doing is looking at it as an extra set of hands,” she said.

Mayor Bill Peduto's chief of staff, Kevin Acklin, said the proposal is a way to consolidate city-owned and URA properties. The legislation doesn't spell out how much startup money the land bank would need, but Acklin said the city plans to appeal to foundations for money. The land bank could receive donated properties and sell them to fortify a revolving fund.

“Having it be an independent entity helps us on the capital-raising side,” Acklin said.

The Legislature passed land bank enabling legislation in 2012. Since then, several municipalities have begun establishing them, including Philadelphia.

Blighted properties carry “a high cost of doing nothing,” Hersh said, because of maintenance costs, emergency calls and a drag on property values.

Pittsburgh and the URA each spend $400,000 a year to maintain vacant properties. City estimates from 2011 say managing all blighted land in the city would cost $20.4 million a year.

In Flint, Mich., the Genesee County Land Bank generated $68,000 in property tax revenue in 2006 from land bank sales. Spending $3.5 million to demolish vacant properties yielded a $112 million increase of surrounding property values in 2005, according to the Land Policy Institute.

Westmoreland County formed a land bank through its redevelopment authority late last year. Executive Director April Kopas said the county has about 500 properties that are tax delinquent and cycled through judicial sales without buyers. They land on a list called the repository, which represents about $7 million in potential tax money.

“Our goal is to try to capture them and redevelop them because when they go into the repository there's little or no value,” she said.

Melissa Daniels is a Trib Total Media staff writer.

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